Kenya to spend $731 million to acquire new SGR cargo trains to set up a logistic hub

NAIROBI, Kenya - The government of Kenya is set to spend $731.53 million in the next three years to revamp the line, build new sidings, and buy more locomotives and cargo wagons for its Nairobi-Mombasa standard gauge railway (SGR)

Kenya’s National Treasury report shows that the country’s Transport Ministry will receive an additional $714.7 million for the “Development of Standard Gauge Railway” between July this year and June 2026.

This reverses a trend where the previous government had cut allocations to the SGR and will push the spending related to this line beyond $5.7 billion by June 2026.

The 2023-2024 financial year will see Ruto's administration allocates $275.79 million from the Railway Development Levy Fund (RDLF) for the Nairobi-Mombasa SGR.

“The purpose of the levy shall be to provide funds for the construction of a standard gauge railway network in order to facilitate the transportation of goods,” reads part of the Miscellaneous Fees and Levies Act which establishes the kitty.

In the next 12 months, the government will also build a new 2.8-kilometer Metre Gauge Railway (MGR) link from Mombasa SGR Terminus to Mombasa MGR station at a cost of $18.29 million.

These funds will also be used to construct a railway bridge across the Makupa causeway that links Mombasa Island to the Kenyan mainland.

A new Metre Gauge Railway (MGR) line linking the Naivasha Inland Container Depot to the existing Longonot Railway Station has been allocated $11.7 million in the next financial calendar.

A logistics hub is planned for Athi River with the state putting aside $8.23 million.
The allocation for this planned logistics hub will reduce to $2.74 million in the year ending June 2025.

Initial plans were to extend the SGR to Uganda; however, this has since stalled with the Treasury not getting funds for the extension to Kisumu and finally to Malaba.

According to Transport and Roads Cabinet Secretary Kipchumba Murkomen“In the long run, we would like to complete the connection of the SGR from Suswa to Kisumu through Bomet, Nyamira, parts of Kisii and later to Malaba. Later, we can think of upgrading the existing MGR via Nakuru to Kisumu and via Eldoret to Malaba,” he said on December 15, 2022.

With the additional expenditure, the government hopes the country’s most expensive piece of infrastructure will help to grow the economy and improve the standard of living for Kenyans.

The administration of former President Uhuru Kenyatta borrowed $4.8 billion in three tranches for the construction of the two phases of the SGR, contributing to a major build-up of Kenya’s stock of debt.

Kenya will use $87 million to acquire rolling stock that will be used to ferry cargo on the SGR from Mombasa to Naivasha.

GAROWE ONLINE